Unauthorised import duty on excisable liquor struck down, while refund was refused for pre-interim collections on unjust enrichment grounds.

A separate import duty on excisable liquor brought into Rajasthan was held unauthorised, because it was not supported by the State's taxing power as an excise duty, countervailing duty, local-area entry tax, or fee under the Constitution and the Rajasthan Excise Act and Rules. The notifications were therefore invalid to the extent they imposed that duty. Refund of amounts already collected before the interim restraint was denied, as the levy was treated as indirect and the burden was presumed to have been passed on to consumers; in the absence of proof that the claimant had borne the burden, restitution was refused on unjust enrichment grounds.

---

---

Issues: (i) Whether the notifications imposing import duty on excisable articles brought into Rajasthan were authorised by the Constitution and the Rajasthan Excise Act and Rules. (ii) Whether refund of the import duty already collected was payable.

Issue (i): Whether the notifications imposing import duty on excisable articles brought into Rajasthan were authorised by the Constitution and the Rajasthan Excise Act and Rules.

Analysis: The levy could not be supported as a tax under the State's taxing power because Entry 51 of List II permits excise duty on goods manufactured or produced in the State and countervailing duty at corresponding rates, but not a separate import duty on liquor brought from another State. Entry 52 was inapplicable because the impost was on entry into the State as a whole, not on entry into a local area. The levy also could not be justified as a fee, since the scheme of the Act and Rules treated permit fee and import duty as distinct exactions, and Rule 69-B separately dealt with permit fees while the impugned notifications imposed import duty as an additional charge. The Court therefore treated the impugned import duty as an unauthorised tax.

Conclusion: The notifications were invalid to the extent they levied import duty, and that levy was struck down.

Issue (ii): Whether refund of the import duty already collected was payable.

Analysis: The levy was an indirect impost and the burden was treated as having been passed on to consumers in the ordinary course. In the absence of proof that the petitioner had borne the burden itself, refund would result in unjust enrichment. The Court therefore declined refund for amounts collected before the interim restraint, while relieving the petitioner from any further recovery after the interim order.

Conclusion: Refund was denied for the amounts already collected before the interim order.

Final Conclusion: The challenge succeeded only in part: the import duty component of the later notification was quashed, but restitution was refused for the pre-interim collections on the ground of unjust enrichment.

Ratio Decidendi: A State can levy only such duties as are authorised by the Constitution and the parent statute; a separate import duty on excisable liquor brought into the State is not saved as excise duty, countervailing duty, or fee, and refund of an indirect levy already passed on to consumers may be refused to prevent unjust enrichment.

---